How to Turn The Disruptive Fourth Industrial Revolution Into an Opportunity of a Lifetime
This revolution has already begun in the music, tax, taxi, newspaper, job recruiting, travel and hospitality industries, among others are you missing on that
The exploding use of the GPS system isn’t the only example of how much technology has become central to our lives today. The average person in Africa has more computing power available on their smartphone than President Clinton had at his disposal while in office. Ninety per cent of the short real-time updates on stock-market and sports that are published online in the US are created by newsbots. World leaders and corporate executives are acutely aware of the immense opportunity and disruptive threat of technology. They know that half the S&P 500 will turn over in the next decade. They are aware that the World Economic Forum has declared that we are at the start of the Fourth Industrial Revolution, given the disruptive power of technologies like Machine Learning and the Internet of Things. This revolution has already begun in the music, tax, taxi, newspaper, job recruiting, travel and hospitality industries, among others. The question is, can we turn this immense disruptive threat into a positive opportunity? The short answer is yes. It requires the vision and courage to see this disruption as an opportunity, and the discipline to execute digital transformation successfully.
The Importance of Both Courage and Discipline for Digital Transformation
The issue of not being courageous to act decisively during an industrial revolution doesn’t need elaboration. More important is the understanding that courage without disciplined execution is a waste. General Electric’s CEO Jeff Immelt had the bold vision of turning GE into a data company. The stalled digital transformation and GEs dramatic drop in share price exemplify the execution issue. GE is hardly alone in the challenges faced with digital transformation. 70per cent of all digital transformations fail. GE deserves credit for having taken on the risk of digital disruption head-on. Beyond courageous goal setting though, it is execution which turns the existential threat of digital disruption into a big opportunity. That’s been the focus of my work over three decades for successful disciplined execution of the digital transformation.
How to Turn This Issue Into a Massive Opportunity
A few common mistakes that leaders consistently make across countries, industries and types of digital transformation. This has resulted in the five-stage digital transformation model (Figure 1). This model has two advantages. It helps cut through the technology hype by defining “digital transformation” as a spectrum of goals. Secondly, it provides a checklist to ensure success at each stage.
Stage one is the Foundation. This is where enterprises are actively automating internal processes, such as selling, manufacturing or finance. In reality, this is automation or digitalization, not transformation, but it provides an important foundation for digitization. To ensure success at this stage the two most important elements are Committed Ownership and an Iterative Execution approach to minimize project failures.
The next stage is called Siloed. You might see individual functions or businesses start to use disruptive technologies to create new business models. These efforts are siloed and there is no overall company strategy driving transformation. The two most important requirements for success at this stage are Disruption Empowerment of the change leadership team and rigorous strategy development to identify the biggest Leverage Points where digital can transform.
Stage three is Partially Synchronized transformation. The owner, leader or CEO has recognized the disruptive power of digital technologies and defined a digital future state. However, the enterprise has not completed transforming to a digital backbone or new business models, nor has the agile, innovative culture become sustainable. To be successful at this stage, it’s critical to identify an Effective Change Model across the entire organization, and for the digital strategy to have been tested for Strategy Sufficiency.
Stage four or Fully Synchronized marks the point where an enterprise-wide digital platform or new business model has fully taken root. However, you are still one technology (or business model) change away from being disrupted. To be successful at this stage, it’s important to re-structure the digital skills and capabilities of the organization. This includes Digital Reorganization to consolidate capabilities in the enterprise and have a robust digital literacy plan for the entire organization to be Staying Current on it.
Stage five or Living DNA is the step where the transformation becomes sustainable. What’s needed to be successful at this stage is the deliberate development of an Agile Culture and to institute systemic Sensing of Risk to the business model.
In the past century, new industries like aviation in the early twentieth century successfully used disciplined processes and checklists to improve operational reliability. Medicine reapplied their model to reduce errors rates in patient care. It is up to us as practitioners in the great disruptive field of digital technologies to follow suit to improve the 70per cent failure rate of digital transformation.